Kratos Defense & Security Systems [KTOS] on Monday said it has completed the sale of its United States and United Kingdom operations of its Electronic Products Division to Britain’s Ultra Electronics Holdings plc for $260 million in cash.
Terms of the deal include upward of an additional $5 million in consideration for taxes incurred as part of the transaction.
Following transaction costs and federal and state tax payments, Kratos said it expects $232.4 million in net proceeds from the deal, which was first announced in June. The company plans to use up to $175 million of the proceeds to retire some of its debt. Kratos also paid $41 million to complete payments on a bank credit facility.
Following the transaction, Kratos’ Microwave Electronic Products business includes operations and manufacturing facilities in Israel.
Ultra is renaming the former Kratos units Ultra Electronics Herley, which will operate within its Communications & Security Division.
“This acquisition is Ultra’s largest to date and the technologies acquired further enhance Ultra’s portfolio and strengthen our position in the electronic warfare market,” Rakesh Sharma, Ultra’s chief executive, said in a statement.